American Painting Contractor Magazine

APCNovDecWeb15

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AMERICAN PAINTING CONTRACTOR • November/December 2015 15 tive to which he or she was going to award the job anyway was offering a fair price. I recently had a conversation with one of our customers, Doug, who lives in a seasonal area, regarding his winter work. He said, "We've always discounted winter work to ensure our guys are kept busy. What we discovered is that the deep discounts just ensure we lose money during the winter. We sell just as much work at a high- er price." Even cutting your price on commercial quotes does not ensure you'll win the contract. The CM or general contractor may have a favorite contractor he asks to match the price, or it may simply be a negotiation ploy to reduce your price further even though you are already the low price. So what should you do rather than just lower your price? Be more strategic. Understand the segments of the market and the customer base where you are most competitive. Stick to your core competency. Don't assume it is always about being the lowest price. Have you ever quoted a job where you were not the lowest price but you were still awarded the contract? Sure. You probably won the job because the customer thought you were more competent than the competition. What did they tell the other bidders—that you were better? Of course not; they said they had a different price or had to think about it. Qualify better. Ask the caller questions. Probe. If they are get- ting four or five quotes, it's doubtful you will be competitive. Look up the bidder's property on a website such as Zillow and see what the value of their home is. Is it a target neighborhood where you do a lot of work? When bidding commercial work, ask more questions rather than waste time throwing out a price on a job you have no chance of winning. In many cases, the per- son looking for a price has nothing to do with the actual award- ing of the job. Spend more time with jobs you have a chance of winning. Sell better. Communicate better. Ask questions. Find out what the customer's real needs are. Then offer product options and alter- natives that fulfill those needs. Get to know the customer and what they want. Learn to be a better salesperson. Improving your sales skills is one of the few areas where you can increase profits without tak- ing more time and creating more stress. Work existing customers harder and try to develop more referrals. Look for an in, rather than merely bidding on public projects or blind Internet calls. Build quality leads by working your customer base. In closing, cutting your price is probably a knee-jerk reaction to your not marketing effectively or staying on top of your back- log. You may find it much more effective to cut overhead or lay people off than to create a pricing structure where it is impossi- ble to be profitable. APC Monroe Porter is president of PROOF Management Consul- tants, a company specializing in seminars and business consulting for contractors. He is also founder of PROSULT Networking Groups, developed to help noncompeting contractors. He can be reached at (800) 864-0284 or monroe@proofman.com. For more information, visit his website at www.proofman.com. Sound Business Management

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